Construction Today - November 2017 - 130
Industrial | FABCON PRECAST
The greater Toronto area is the third-largest warehouse and distribution market
behind Chicago and Los Angeles. "It's silly
to me we had a gap up there," Houtman
adds. "When Platinum came onboard, they
told us they love the company model, the
loyalty of our clientele and that we should
grow where we want to grow."
With the new owners' blessing, Houtman
and Vice President of Business Development John Allgaier undertook a market
research project to determine whether
Canada was a viable market for Fabcon.
"We didn't have too many surprises from
the research," Allgaier adds. "The Canadian
market is underserved and has one primary
precast supplier in the market."
Developers in Toronto advised Fabcon
that they need competition in the market
when it comes to precast wall panel construction because there is only one major
producer in the area.
As a result, Platinum Equity has been in
negotiations to acquire a smaller precast
producer in the area. "I would hope that we
will have a plant up there in the next six
to 12 months," Houtman says. "We are in
negotiations with a couple companies up
there and would add to their capabilities
and capacity, bringing our technology
to them while leveraging their current
market position. It will be a great synergy
to learn from that company and we can
bring our technology to their market. It's a
In addition to acquiring a plant in
Toronto, Houtman and Allgaier also have
suggested building a new plant in the
Northeast to better serve that market. "As
successful as we have been in the northeastern part of the U.S., our research confirmed
we are underserving the market even with
our recent expansion of our Pennsylvania
plant," Houtman adds. "We could build a
new plant in New England, open the doors
and be immediately successful."
Fabcon has also identified population
growth in North and South Carolina, Georgia and Tennessee that presents a market
need for greater expansion. As the population continues to grow in the south, Fabcon
sees an increase in demand for more distribution centers, retail services and housing
in years to come. In the south, cooling
technology is just as important as heating
in the north, which would be an advantage
for Fabcon in the southern markets.
Although the company has identified
opportunities to the west, Houtman says
the company maintains its leapfrog strategy
and is not quite ready to make that jump
before first exploring Colorado. "In addition
to looking at new geographic markets,
we are expanding capacity at a couple of
our plants where we know the market is
being underserved," Allgaier says. "We are
Fabcon strives to improve
its performance in safety,
quality, delivery and cost.
CONSTRUCTION-TODAY.COM NOVEMBER 2017
also focused on upgrading plant assets to
improve our quality. These investments are
just smart business because it allows us to
better serve our customers."
Fabcon has remained successful for nearly
five decades because of its ability to quickly
adapt to market changes. Buildings the
company erected 10 to 15 years ago no
longer meet the current market needs,
"Fortunately, it has worked to our strong
suit, but buildings have gotten taller and
taller," he adds. "Major retail shippers used
to have a 30-foot clearance, then 32 feet, 34
feet, 36 feet and now 40 feet. Once you put
in the foundation and roof system, you're
talking about a 56-foot-tall panel and there
are very few precasters who can do something like that."
As logistics companies struggle with labor shortages, more automated systems are
going into warehouses and forcing ceiling
heights to get taller.
"A typical warehouse was 18 feet clear
height and today it's 26 feet," Houtman adds.
"The sizes of buildings are also getting larger.
Typically, one of our major retail shipper
clients has one million square feet. If we had
a one-million-square-foot building years